Chinese authorities on Friday ended a years-long investigation into the financial-tech firm Ant Group, a subsidiary of the e-commerce leader. Ali Baba (Baba) The news sent BABA shares soaring.
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The government fined Ant $982 million for violating consumer protection and corporate governance laws. The Wall Street Journal reported. Meanwhile, the People’s Bank of China announced the fine in a statement posted on its website. The bank has been behind Ant’s restructuring since blocking the company’s $34 billion initial public offering in October 2020.
The fine completes a regulatory overhaul by Ant, which operates popular digital payment platform Alipay. Reuters said. In addition to Alipay, Ant’s businesses include payments, consumer lending and insurance products.
Ant said it has made changes to its operations and management as a result of the regulatory investigation. The fintech firm hopes to update its plans for an IPO soon. Alibaba owns about a third of Ant, the Journal said.
Baba’s share in the news is rising
In the stock market today, Baba’s stock rose 8% to close at 90.55. A government investigation into Ant weighed heavily on Alibaba stock.
BABA stock peaked at 319.32 in October 2020, when Chinese regulators halted Ant’s IPO and began a broader crackdown on the country’s internet sector.
Alibaba ranks 14th out of 59 stocks in IBD’s retail-internet industry group. IBD Stock Checkout. But BABA stock has an average IBD composite rating of 53 out of 99.
The e-commerce company has been facing a slump in sales lately. Its revenue has declined on a year-on-year basis in the last four quarters.
Follow Patrick Seitz on Twitter @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.
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